Which of the Following Identifies the Optimal Usage of Inputs

question 29

Multiple Choice

Which of the following identifies the optimal usage of inputs by a profit-maximizing firm?

• A) Marginal product of labor = marginal product of capital = 0
• B) Marginal product of labor/price of labor = marginal product of capital/price of capital
• C) Marginal revenue product of labor = marginal revenue product of capital
• D) Marginal cost of labor = marginal cost of capital
• E) Marginal product of labor/marginal product of capital = price of capital/price of labor

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Definitions:

Price per Unit

The cost associated with a single unit of a product or service, allowing for comparison and calculation of total costs.

Units Accepted

This refers to items or quantities that have been received and approved by a buyer or quality control as meeting the required standards.

Nonconformity

A situation where goods or services do not meet the standards or specifications agreed upon in a contract.

Accepted Goods

Products or items that have been received and acknowledged as meeting the quality and quantity specifications of the purchase contract.